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Ethylene01-Jul-2024
RIO DE JANEIRO (ICIS)–US manufacturing
activity remained in contraction territory in
June but output in the chemicals sector was
healthy on the back of healthy new orders, the
Institute of Supply Management’s (ISM’s)
purchasing managers’ index (PMI) survey showed
on Monday.
The PMI stood at 48.5% in June, down from
48.7
points in May.
The contraction in June was the third
consecutive monthly one, and the 19th in the
last 20 months.
Chemicals, however, posted healthy activity
with one chemicals player reporting in the ISM
survey “high volumes of customer orders”.
In plastics and rubber, a respondent described
increased orders on the back of seasonal
restocking, but the sector overall remained in
contraction territory.
“Demand was weak again, output declined and
inputs stayed accommodative. Demand slowing was
reflected by the New Orders Index improving to
marginal contraction, New Export Orders Index
returning to contraction, Backlog of Orders
Index dropping into stronger contraction
territory and Customers’ Inventories Index
moving into the low side of the ‘just right’
range, neutral for future production,” said
Timothy R Fiore, chair of the ISM’s committee
compiling the PMI index.
“Output (measured by the Production and
Employment indexes) declined compared to May,
with a combined 3.5-percentage point downward
impact on the Manufacturing PMI calculation.
Panelists’ companies reduced production levels
month over month as head count reductions
continued in June.”
According to ISM, eight manufacturing
industries reported growth in June: printing
and related support activities; petroleum and
coal products; primary metals; furniture and
related products; paper products; chemical
products; miscellaneous manufacturing; and
nonmetallic mineral products.
Nine industries reported contraction: textile
mills; machinery; fabricated metal products;
wood products; transportation equipment;
plastics and rubber products; food, beverage
and tobacco products; electrical equipment,
appliances and components; and computer and
electronic Products.
ICIS VIEWKevin Swift,
economist at ICIS, highlighted how both new
orders and order backlogs fell compared with
May.
“The reading came below expectations of
improvement. The expansionary reading in March
ended 16 months of contraction in manufacturing
but since then, the trend has been soft. June
marks a third contractionary reading and was
disappointing… The chemical industry gained for
the sixth month after 16 months of decline.”
“New orders and order backlogs, when combined
with the reading on inventories, are good
indicators of future activity. Inventories
contracted at faster pace as well. An uptick in
orders could translate into higher production.”
Earlier on Monday, analysts at S&P Global
said manufacturing in Brazil – the Americas’
second largest economy – had recovered slightly from
floods-hit May, although some economic
challenges such as the depreciation of the
Brazilian real were putting a cap on growth
prospects, they added.
US MANUFACTURING
June 2024
Index
Series Index Jun
Series Index May
Percentage Point Change
Direction
Rate of Change
Trend* (Months)
Manufacturing PMI
48.5
48.7
-0.2
Contracting
Faster
3
New Orders
49.3
45.4
+3.9
Contracting
Slower
3
Production
48.5
50.2
-1.7
Contracting
From Growing
1
Employment
49.3
51.1
-1.8
Contracting
From Growing
1
Supplier Deliveries
49.8
48.9
+0.9
Faster
Slower
4
Inventories
45.4
47.9
-2.5
Contracting
Faster
17
Customers’ Inventories
47.4
48.3
-0.9
Too Low
Faster
7
Prices
52.1
57.0
-4.9
Increasing
Slower
6
Backlog of Orders
41.7
42.4
-0.7
Contracting
Faster
21
New Export Orders
48.8
50.6
-1.8
Contracting
From Growing
1
Imports
48.5
51.1
-2.6
Contracting
From Growing
1
Thumbnail shows an automobile manufacturing
line. Image by Anna
Szilagyi/EPA-EFE/Shutterstock)
Ethylene01-Jul-2024
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 28 June.
US June propylene
contracts rise on higher spot
prices
US June propylene contracts for the majority of
market participants settled up 2 cents/lb on
higher spot prices.
US consumer
confidence and ICIS leading business barometer
fall in June
US consumer confidence fell in June, as did the
ICIS US leading business barometer (LBB).
Aditya Birla
Chemicals plans new US epoxy facility in
Texas
Aditya Birla Chemicals is planning to build a
new epoxy facility in Beaumont, Texas,
according to the company.
Flat chemical
prices to increase in coming quarters; volumes
booming – US HB Fuller
Most chemical prices have stabilized, and a few
are posting small rises, a trend which should
strengthen in coming quarters as global
manufacturing picks up, executives at
US-headquartered adhesives producer HB Fuller
said on Thursday.
SHIPPING: Panama
Canal increases drafts, to add another transit
slot on 5 August
The Panama Canal Authority (PCA) has increased
the maximum allowable draft to transit the
Neopanamax locks effective immediately,
announced that another increase will take
effect on 11 July, and will add an additional
booking slot in the Neopanamax locks during
Booking Period 2 for booking dates beginning 5
August.
Acrylic acid01-Jul-2024
SINGAPORE (ICIS)–In this podcast, ICIS analyst
Claire Gao explores the oxo-alcohols market
overview and outlook.
Q2 oxo-alcohols prices largely fluctuate
upwards amid low inventories, but decline at
the end of the quarter
Several new plants scheduled to start-up in
Q3 may intensify competition
Plentiful exports in up and downstream
sectors in H1 2024; huge uncertainty in H2
Global News + ICIS Chemical Business (ICB)
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Speciality Chemicals01-Jul-2024
LONDON (ICIS)–Eurozone manufacturing sector
activity slipped further into contraction in
June as demand slowed in most of the bloc’s
largest economies, while conditions improved in
the UK.
The purchasing managers’ index (PMI) for the
eurozone sector fell to 45.8 from 47.3 the
previous month, representing the fastest rate
of decline seen so far this year as demand
weakened and new export orders saw a 28th
consecutive monthly drop.
Germany was the weakest-performing of the eight
largest eurozone member state economies, with
the manufacturing PMI sinking to 43.5,
according to data from S&P Global. A PMI
score of below 50.0 signifies decline.
Despite the ongoing impact of Red Sea shipping
disruption, manufacturers in the region
reported further shortening of supplier
delivery times.
Despite steadily-falling order times, input
costs for eurozone factories increased for the
first time in 16 months, while the prices
charged for finished items continued to fall in
the face of the ongoing demand chill.
Reported across much of the bloc, weaker demand
resulted in manufacturers purchasing lower
quantities of raw materials on the back of
lower production requirements, with the drop in
buying levels sharper than in May.
“This decline comes after a record stretch of
25 consecutive months of falling demand, but a
vague hope that things were improving in May
when the respective index showed some
increase,” said Cyrus de la Rubia, chief
economist at Hamburg Commercial Bank, which
helps to assemble the PMI data.
“This means that any significant recovery will
likely be postponed until at least the end of
the summer or the beginning of fall,” he added.
Output in Greece remained on growth footing
despite its manufacturing PMI dropping to a
six-month low, standing at 54.0, with activity
in Spain and the Netherlands also growing
despite a slowdown in the rate of expansion.
Conditions in Ireland, France, Italy and
Austria remained contractionary, despite
manufacturing output in Italy firming to a
two-month high at 45.7.
Manufacturing activity in the UK continued firm
during the month, with activity remaining near
May levels at 50.9 as broad-based new order
intake across sub-sectors continued to drive
growth.
Despite the strong demand across manufacturing
sectors, that growth was largely confined to
orders to large firms, with demand falling for
smaller and mid-sized businesses.
Two months of stronger activity has also driven
an increase in cost inflation, modest overall
but particularly pronounced for input prices.
“The performance of the domestic market remains
a real positive, providing a ripe source of new
contract wins,” said S&P Global director
Rob Dobson.
“In contrast, the ongoing weak export
performance is concerning, with manufacturers
reporting difficulties in securing new business
in several key markets including the US, China
and mainland Europe,” he added.
Stronger manufacturing conditions in the UK, as
well as certain key markets, increase the hope
that the decline seen in the eurozone in June
may be short-lived, according to de la Rubia.
“We are inclined to see this more as a
temporary blip rather than a sign of a
prolonged downturn,” he said. “Manufacturing
growth was seen in other parts of the world in
June, such as the United States, UK, and India,
according to their respective Flash PMI. This
global recovery provides a supportive backdrop
for Eurozone manufacturers.”
Focus article by Tom Brown.
Thumbnail photo: A production line at BMW’s
factory in Munich, Germany (Source: Anna
Szilagyi/EPA-EFE/Shutterstock)
Petrochemicals01-Jul-2024
LONDON (ICIS)–Click
here to see the latest blog post on
Chemicals & The Economy by Paul Hodges,
which celebrates the blog’s 17th anniversary.
Editor’s note: This blog post is an opinion
piece. The views expressed are those of the
author and do not necessarily represent those
of ICIS. Paul Hodges is the chairman of
consultants New
Normal Consulting.
Speciality Chemicals01-Jul-2024
LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended Friday 28
July.
Soft MA demand pressures prices lower, Red Sea
tensions cap supply
European maleic anhydride (MA) spot prices have
softened as availability improved while poor
demand slowed orders for July deliveries.
Europe capro supply could be more balanced in
July
Following the severe shortages the European
caprolactam (capro) market has struggled with
over the past few months, supply is expected to
be more balanced with demand in July.
Europe orthoxylene sentiment for July
stable-to-soft as feedstock costs show a mixed
trend
Europe orthoxylene (OX) contract price
discussions for July are due to start next week
amid persistently weak demand and mixed
feedstock xylenes movements.
Covestro to save €400m/year by 2028 through
focus on digitalization, AI
Covestro will save €400 million annually in
material and personnel costs by the end of 2028
through a transformation programme focused on
digitalization and artificial intelligence, it
said on Tuesday.
ADNOC and Covestro in concrete negotiations
following €11.7bn offer
Covestro and ADNOC have begun concrete
negotiations on a possible investment by the
Abu Dhabi oil company that would value the
German chemical producer’s equity at €11.7bn,
Covestro said on Monday.
Crude Oil01-Jul-2024
SINGAPORE (ICIS)–Caixin’s China manufacturing
purchasing managers’ index (PMI) rose to 51.8
in June from 51.7 in May as production growth
accelerated on the back of rising new orders,
the Chinese media firm said on Monday.
Caixin’s headline PMI print was in contrast to
China’s June official manufacturing PMI which
remained stable from May at 49.5, data from the
National Bureau of Statistics (NBS) showed on
30 June.
A PMI reading below 50 indicates contraction in
the manufacturing economy, while a higher
number denotes expansion.
The June reading marks the Caixin index’s
eighth straight month in expansionary territory
and its highest level since May 2021, showing
ongoing improvement in the sector, said Wang
Zhe, a senior economist at Caixin Insight
Group.
Manufacturing output growth reached a two-year
high, driven by five consecutive months of
expansion in both supply and demand, he said.
Demand remained strong, with the total new
orders subindex in expansionary territory for
11 months straight, led by consumer and
intermediate goods, according to Wang.
While exports continued to grow, the pace
slowed for the first time in six months,
suggesting a slight weakening of overseas
demand, he said.
“Recent macroeconomic data show that the
economy continues to recover, with stable
production, demand, employment and prices, as
well as strong exports,” Wang said.
“Despite this, insufficient market confidence
and effective demand remain key challenges.
Looking ahead, policy support requires further
consolidation.”
The Caixin PMI surveys small and medium-sized
enterprises (SMEs) and export-oriented
enterprises located in eastern coastal regions
while the official PMI is tilted toward larger
state-owned enterprises.
Gas01-Jul-2024
SINGAPORE (ICIS)–Here are the top stories from
ICIS News Asia and the Middle East for the week
ended 28 June 2024.
Asia melamine sees uptick on tighter supply;
demand recovery uncertain
By Joy Foo 28-Jun-24 12:54 SINGAPORE
(ICIS)–Asia’s melamine spot market for
China-origin product faced some pressure from
early June due to lagging demand.
China MEG market supported by limited import
arrivals
By Cindy Qiu 26-Jun-24 12:20 SINGAPORE
(ICIS)–China’s monoethylene glycol (MEG)
prices rose after falling in June, reflecting
supply-demand dynamics, but the price growth
may be capped by increasing domestic supply and
curtailed downstream polyester production,
despite limited import arrivals expected in
July.
India’s BPA import price surges; freight
continues to exert pressure
By Li Peng Seng 24-Jun-24 11:53 SINGAPORE
(ICIS)–India’s bisphenol A (BPA) average
import price hit its highest level in nearly 20
months recently due to firm ocean freight
rates, a phenomenon that is expected to persist
in the short term as vessel space is likely to
stay tight.
PODCAST: Asia base oils supply, demand to
gradually rise in H2
By Damini Dabholkar 26-Jun-24 18:13 SINGAPORE
(ICIS)–Asia’s base oils supply is expected to
improve slightly in H2 2024, while a seasonal
peak in overall demand is due to kick off in
the later part of Q3.
INSIGHT: Asia isocyanates H1 performance mixed,
poor expectations for Q3
By Shannen Ng 26-Jun-24 14:30 SINGAPORE
(ICIS)–Demand in Asia’s import markets for
polymeric methylene diphenyl diisocyanate
(PMDI) and toluene diisocyanate (TDI) is likely
to remain limited in the upcoming summer months
of July and August, and the outlook for late Q3
is uncertain.
Chemanol to supply methanol to Saudi Amiral
project over 20 years
By Pearl Bantillo 25-Jun-24 12:52 SINGAPORE
(ICIS)–Saudi Arabia’s Methanol Chemicals Co
(Chemanol) has signed a 20-year deal to supply
methanol to the Amiral petrochemical project of
Saudi Aramco Total Refining and Petrochemical
Co (SATORP).
Phosphoric Acid28-Jun-2024
HOUSTON (ICIS)–Global sustainable technology
firm Metso announced it has been awarded
an order by Brazilian producer Galvani
Fertilizante to deliver a lime calcination kiln
and cooler package for their fertilizer plant
in Irece, Brazil.
The company said Galvani is taking a
significant step at their Irece project by
introducing sustainable technological
innovation with this new unit expected to
produce 350,000 short tons of phosphate
concentrate and 600,000 short tons of
agricultural limestone annually.
Metso will supply a rotary kiln, a rotary
cooler and ancillary equipment with the kiln
and cooler system a critical part in the
process to remove limestone from the phosphate
concentrate.
The kiln will be the largest lime calciner
Metso has ever delivered, measuring almost six
meters in diameter and over 140 meters in
length.
For its part Galvani said the partnership will
bring strategic benefits and allow gains in
mineral processing at their new unit.
“The laying of the foundation stone for this
unit, which took place in May of this year,
reinforces the importance of this project for
the development of the economy of the state of
Bahia, in Brazil, and for the generation of
jobs and income,” said Marcelo Silvestre,
Galvani CEO.
“This milestone represents our commitment to
innovation and development, boosting our
ability to meet the demands of the fertilizer
market.”
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